Economics

One year ago

ON SEPTEMBER 9 of last year, Free exchange and others were still puzzling over various details of the federal government's takeover of Fannie Mae and Freddie Mac. See this for a good bit of the discussion. Reading it reminds me how intellectually invigorating those days were (shame they were also terrifying). Worth reposting in its entirety is this, from later in the day:

WHAT is up with Lehman Brothers? It's off 40% on the day. The Financial Timesreports:

In mid-morning trading, Lehman shares were down $3.90 at $10.25 on the New York Stock Exchange after falling as low as $8.50, their lowest level since October 1998 on reports that talks about a possible deal with Korea Development Bank had ended.

This is not the first time Lehman has failed on a bid to unload assets and raise capital in recent months, and the continued setbacks have taken a serious toll on the firm's shares.

What's more, Washington Mutual credit default swaps hit an all time high today, and shares in WaMu are off almost 20%. And the TED spread, a popular measure of market nervousness, is up again today—that's two consecutive increases in the wake of the Frannie takeover. Not exactly a roaring vote of confidence in credit markets.